According to a summary of the payroll of Bailik Co., $880,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $40,000 was subject to state and federal unemployment taxes.
Required:
Question 1: Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%.
Question 2: Journalize the entry to record the accrual of payroll taxes. If an amount box does not require an entry, leave it blank.
Note: Be sure to show how you arrived at your answer.